Finance:Virtual POS
A virtual point of sale (VPOS) is any software system which allows for the business transfer of money without the use of physical currency nor card readers.[1] Online payment is increasingly common, especially since 2020 due to spending behavior changes occurring during the pandemic.[2] According to the US Census Bureau, 16.2% of total retail sales in the first quarter of 2025 were through online e-commerce systems.[3]
These systems are widely used across industries, from small businesses to global retailers.[4][5]
History
The use of the internet to sell products predates VPOS systems; customers would have to use non-digital payments to purchase things shown online.[6] The first use of the internet to sell a product in a legitimate capacity was likely in 1994, with the sale of a CD by Sting via NetMarket.[6][7] The transaction used encryption to send the customer's card information securely.[6]
Advantages
The use of a VPOS system can potentially benefit a business. Integration into a greater e-commerce arrangement allows for small business owners to engage in business entirely online, sidestepping a need for a physical presence. Etsy, a website with an emphasis on the sale of self-made crafts such as those created by self-employed artisans, reported having 8 million active sellers in 2024.[8]
Disadvantages
While online transactions are normally seen as extremely convenient,[2] they possess some drawbacks compared to more conventional systems.
Using online resources to process card information can often incur a fee or penalty, which the merchant must pay on each transaction. For example, as of August 2025, commercial transfers between United States accounts using PayPal incur a fee between 2.29% and 4.99%.[9]
References
- ↑ "What is a virtual POS? What businesses should know about virtual payment terminals". Stripe. 7 April 2024. https://stripe.com/resources/more/what-is-a-virtual-pos-what-businesses-should-know-about-virtual-payment-terminals.
- ↑ 2.0 2.1 Haupt, Angela (26 July 2022). "Why Online Shopping Makes You So Happy". Time. https://time.com/6200717/online-shopping-psychology-explained/.
- ↑ "Quarterly Retail E-Commerce Sales". US Census Bureau. 19 May 2025. https://www.census.gov/retail/ecommerce.html.
- ↑ Lawal, Sakiru (April 2022). "A Critical Analysis of Point of Sales (POS) Types and Their Efficiency for Business". International Journal of Eminent Scholars 8 (1): 82-92. https://www.globalacademicstar.com/download/article/a-critical-analysis-of-point-of-sales-pos-types-and-their-efficiency-for-business.pdf.
- ↑ Clymo, Rob (2021-11-05). "What does the future of POS systems look like?" (in en). https://www.techradar.com/features/what-does-the-future-of-pos-systems-look-like.
- ↑ 6.0 6.1 6.2 Lewis, Peter (August 12, 1994). "Attention Shoppers: Internet Is Open". New York Times. https://www.nytimes.com/1994/08/12/business/attention-shoppers-internet-is-open.html. Retrieved November 29, 2014.
- ↑ Fessenden, Maris (30 November 2015). "What Was the First Thing Sold on the Internet?". Smithsonian Magazine. https://www.smithsonianmag.com/smart-news/what-was-first-thing-sold-internet-180957414/.
- ↑ "Investor Relations – Key Figures". Etsy. https://investors.etsy.com/overview/key-figures/default.aspx.
- ↑ "Commercial Transaction Rates". Paypal. https://www.paypal.com/us/business/paypal-business-fees#statement-2.
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